Investment house Roth Capital has picked drug delivery firm Prolor Biotech Inc. (Bulletin Board: PBTH) (formerly Modigene) as one of the three most promising biotechnology companies in the US for 2010. This is the third time in the past 18 months that an investment house has predicted a bright future for the company and its share.
Prolor is due to publish the results of the Phase I clinical trial on its human growth hormone.
Prolor's share closed at $2 on Wall Street yesterday, giving a market cap of $70 million. The share has been rising steadily, and Roth Capital predicts further rises during 2010: it gives the share a "Buy" recommendation with a target price of $4.
Roth Capital analysts wrote that while Prolor is "tremendously under the radar", they believe that "its approach to long-acting protein therapeutics is more elegant than existing approaches (which we consider to be "hammer and tongs" approaches, by comparison), and that positive clinical data will bring more attention to this stock, leading to price appreciation."
Roth Capital expects Prolor to "meaningfully outperform the rest of the biotech space in 2010."
The investment house says that empirical data shows that profits can be made by purchasing shares of biotech companies in advance of known clinical or regulatory events,and that "good excess returns may be obtained by purchasing shares of companies facing important events 3-4 months prior to the event, and selling before the event."
Prolor uses innovative methods to develop longer-lasting, proprietary versions of already approved therapeutic proteins. The goal is to replace the need for daily injections with less frequent ones. The company is targeting drugs with $80 billion in aggregate global annual sales. The technology is being applied to scores of drugs, hence the company's huge potential.
Prolor chairman Dr. Philip Frost is also the company's largest shareholder. Frost sold Ivax to Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) for $7.4 billion in 2006.
Roth Capital notes in its disclosure that it makes a market in Prolor shares, and that one of its analyst's (or household member) is a shareholder in the company.
Published by Globes [online], Israel business news - www.globes-online.com - on December 29, 2009
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